What is Commercial Auto Insurance?

Does your business rely on company vehicles to operate? Then you need adequate commercial auto insurance coverage. Commercial Auto insurance is an insurance policy that helps protect your business from unforeseen financial losses. If it is involved in an accident, it is a type of auto insurance that is made for vehicles that are used for business purposes.

What is Commercial Auto Insurance

Commercial auto insurance is a legal contract between you and your insurance provider. It outlines how the company compensates you for your financial losses if the vehicle you use for business is involved in an accident or damaged by problems covered by the policy. 

Your car insurance policy won’t cover a claim if you drive a vehicle for business and get into an accident. This is why you need to protect your business with this commercial vehicle insurance policy. It helps to pay for injuries and property damages done to others if your employee or you cause an accident while you are driving the work vehicle.

What Does Commercial Auto Insurance Cover?

Although the business car insurance policy is very similar to the personal auto insurance policy, it is different in terms of exclusions, coverage, limits, and who is eligible. For instance, unlike personal ones, commercial policies always offer higher liability. This is what the business vehicle policy covers.

Commercial Auto Coverage

Types of CoverageWhat it covers
Bodily injury liability insuranceIt helps to pay for other people’s injuries that you or your worker caused with the work vehicle accidentally. And your legal expenses if you get sued for the accidents
Property damage liabilityThis pays for damages done to other people’s property if you or your worker cause an accident. It also helps to pay for your legal expenses if you are sued for the accident.
Medical payment coverageThis is for medical bills and other expenses for you and your passengers, no matter who is to blame for the accident. This coverage does not help to cover lost wages. 
Uninsured motorist coverageThis helps to pay for your injuries if an uninsured driver causes an accident. In most states, this coverage covers the damage done to your car by an uninsured driver.
Underinsured motorist coverageIt helps make payments for your medical bills if a driver who does not have enough liability to make payments for your bills causes the accident.
Collision insuranceIt makes payments to replace or repair your business vehicle after car accidents.
Comprehensive insuranceIt helps to pay to replace or repair your business vehicle in scenarios like fire, vandalism, theft, collisions with animals, and falling objects.
Personal injury protectionIt helps to pay medical bills and other expenses like lost wages for you and your passengers, no matter who is to blame for the accident.
Combined single limitThis provides one overlimit for property damage and bodily injury claims against you, rather than two different limits.

What is Not Covered by Commercial Car Insurance?

Not everything concerning using vehicles concerns this policy. These are the things the policy does not cover.

  • Firstly, a rental car used for business
  • Secondly, Personal cars used for business
  • Customer car damage or theft due to problems like fire, vandalism, or weather would be covered by garagekeeper insurance.
  • Lastly, unattached equipment and tools in a commercial van or truck

The above-listed items may not be covered by the commercial auto insurance policy. So keep this in mind when purchasing the policy.

Why do I Need Commercial Auto Insurance?

Not having this type of insurance puts your business at risk of having to make payments for damages or injuries if your company vehicles are involved in accidents. Without this coverage, you may have to pay for the legal and medical bills of your or your workers if involved in an accident. You might also have to pay for potential lawsuits, injuries, or damages to other people’s vehicles and properties when your vehicle is the cause of the accident.

Additionally, commercial vehicle insurance offers comprehensive and collision coverage. This can help you pay for your work vehicle repair or replacement for problems like collisions with animals, theft, accidents, floods, weather, and car accidents.

How Much Does It Cost?

Your business car insurance policy’s cost will depend on different factors, such as:

  • Firstly, policy coverage limits
  • Employee driving records
  • Claim History
  • Types of vehicles
  • In addition, the number of vehicles
  • Business size
  • Also, business and driving risk
  • The number of workers driving the insured vehicles
  • Lastly, policy deductible.

The above list can affect the premium you will have to pay for the insurance, depending on the insurer.

Who is Covered by my Commercial Auto Insurance Policy?

Just so you know, the policy covers you and your licensed worker, who is listed on your policy. You should add employees who drive commercial vehicles regularly to the policy.

What Vehicles are Covered by the Policy?

Meanwhile, if you want to purchase this policy for your business; these vehicles are covered by the policy.

  • Box trucks Commercial trucks and vans
  • Food trucks
  • For-hire livery
  • Tow trucks
  • Company cars

How to Purchase Commercial Auto Insurance

To purchase this policy, I will advise you to talk to an independent insurance agent. An agent will help you identify the right coverage for the company and the type of work you do. Take your time to compare the coverage and reviews of different companies. Make sure you visit the company’s physical branch to purchase the policy in order not to fall for scams.


Finally, make sure you add coverage that matches the type of work you do to this policy. So you don’t have to worry much while carrying out your activities if an accident occurs. You can visit the internet today and check out the best insurance companies that offer the best rates for this auto insurance and get it for your business.